Kostelnik Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $237,000, variable manufacturing overhead of $3.90 per machine-hour, and 30,000 machine-hours. The company has provided the following data concerning Job A496 which was recently completed: Number of units in the job 20 Total machine-hours 80 Direct materials $ 500 Direct labor cost $ 2,160 The total job cost for Job A496 is closest to: A $3,604 B $1,444 C $2,660 D $3,10
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
choose the best answer among all (mcqs):
1) Kostelnik Corporation uses a job-order costing system with a single plantwide predetermined
|
Number of units in the job |
20 |
|
Total machine-hours |
80 |
|
Direct materials |
$ 500 |
|
Direct labor cost |
$ 2,160 |
The total
|
|
A |
$3,604 |
|
|
B |
$1,444 |
|
|
C |
$2,660 |
|
|
D |
$3,10 |
2) Beans Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $162,000, variable manufacturing overhead of $2.80 per direct labor-hour, and 60,000 direct labor-hours. Recently, Job K818 was completed with the following characteristics:
|
Number of units in the job |
10 |
|
Total direct labor-hours |
50 |
|
Direct materials |
$ 920 |
|
Direct labor cost |
$ 1,400 |
The predetermined overhead rate is closest to:
|
|
A |
$2.80 per direct labor-hour |
|
|
B |
$8.30 per direct labor-hour |
|
|
C |
$2.70 per direct labor-hour |
|
|
D |
$5.50 per direct labor-hour |
3) Lucas Corporation uses the weighted-average method in its
|
|
|
|
|
|
Beginning work in process inventory: |
|
|
|
|
Units in beginning work in process inventory |
|
900 |
|
|
Materials costs |
$ |
9,600 |
|
|
Conversion costs |
$ |
7,700 |
|
|
Percent complete with respect to materials |
|
60 |
% |
|
Percent complete with respect to conversion |
|
45 |
% |
|
Units started into production during the month |
|
8,100 |
|
|
Units transferred to the next department during the month |
|
6,900 |
|
|
Materials costs added during the month |
$ |
115,800 |
|
|
Conversion costs added during the month |
$ |
120,500 |
|
|
Ending work in process inventory: |
|
|
|
|
Units in ending work in process inventory |
|
2,100 |
|
|
Percent complete with respect to materials |
|
75 |
% |
|
Percent complete with respect to conversion |
|
20 |
% |
The cost of ending work in process inventory in the first processing department according to the company's cost system is closest to:
|
|
A |
$67,851 |
|
|
B |
$50,888 |
|
|
C |
$13,570 |
|
|
D |
$30,660 |
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